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Homeowners Insurance
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Editorial DisclosureWhat is homeowners insurance?
Homeowners insurance financially protects you if something bad happens to your home. It also covers your personal belongings, the cost of hotel stays if your home is too damaged to reside in, and legal expenses if you’re sued because of an accident.
Although not required by law like auto insurance is, most mortgage lenders will require that you keep the home insured throughout the duration of your mortgage term.
What does homeowners insurance cover?
Homeowners insurance protects your home from the perils detailed in your policy, which typically include fire, wind, hail, theft, vandalism, and water damage from burst pipes.
Your coverage is broken into several types that serve a specific purpose and have their own limit amounts.
What are common types of homeowners insurance coverage?
Dwelling - Protects against damage to your home itself, like the structure or roof. This should be equal to the rebuild cost of your home.
Other structures - Protects against damage to detached structures like your garage, pool, fence, or mailbox.
Personal property - Reimburses you if your personal belongings (furniture, electronics, kitchenware, etc) are damaged or stolen.
Additional living expenses - Covers costs like temporary lodging and eating out if your home becomes unlivable.
Personal liability - Reimburses you if you’re sued for accidental injury or property damage to others (think dog bites).
Medical payments - Covers the costs of minor injuries if someone who isn’t a resident of your home is injured on your property.
→ Learn more about what homeowners insurance covers
How much does homeowners insurance cost?
According to a 2019 report released by National Association of Insurance Commissioners (NAIC), the average homeowners insurance premium was $1,211 annually (around $100 a month).
Your cost will depend on different factors, but the coverage amount is a good place to start. Here’s the average annual premium for different levels of dwelling coverage. To find the best rates in your state, check out our state-by-state home insurance guide.
| Coverage amount | Annual premium | Per-month average premium |
|---|---|---|
| $100,000 to $200,000 | $936 / year | $78.00 / month |
| $200,000 to $300,000 | $1,092 / year | $91.00 / month |
| $300,000 to $400,000 | $1,252 / year | $104.33 / month |
| $400,000 to $500,000 | $1,467 / year | $122.25 / month |
| $500,000 and over | $2,149 / year | $179.00 / month |
What factors determine the cost of my homeowners insurance policy?
Your home - How long your home’s been around, where it’s located, and which materials it's made from will affect how much you'll pay to insure it.
Your coverage - Rates are directly tied to the amount of protection in your policy. The higher and more robust your coverage, the higher your insurance premiums will be.
Your credit score - Homeowners with poor credit are statistically more likely to file insurance claims, so it is a red flag for insurance companies.
Your claims history - If you’ve filed multiple insurance claims in the past, and/or your home has a history of structural damage and loss, your insurance premiums will probably be higher.
→ Learn more about how much homeowners insurance costs
How to save on homeowners insurance
Check with your insurance company to see what you can do to trim your current insurance premium. One way is to simply raise your deductible
But many insurance companies offer a plethora of additional discounts, including:
Multi-policy discount - Bundle two or more insurance policies, like home and auto, with the same company to save as much as 20% on coverage.
Protective devices discount - If your home has deadbolts, storm-resistant roofing, and centralized fire and burglar alarms, you’ll be eligible for a protective devices discount.
Claim-free discount - Many insurers will trim your insurance rates if you haven’t filed a claim in the last 3 to 5 years.
Loyalty discount - Expect a hefty policy discount if you’ve been insured with the same company for 5 years or longer.
First-time homebuyer discount - Most insurance companies will offer discounts if you’re insuring a new home or if you recently purchased a home.
→ Learn more about how to find home insurance discounts
How to buy homeowners insurance
Whether you’re insuring your first home or you're a current homeowner re-shopping for lower rates, buying home insurance is simple.
In fact, you can do it in just six steps. Here’s how it works:
Collect your info - You'll need to provide details about your home and living situation in order to get quotes. Re-shopping your policy? Have your current declarations page handy to make the process smoother.
Choose a coverage amount - You should have enough coverage to fully replace your home (known as the replacement cost). You may also need flood or earthquake coverage. We'll recommend an amount when you apply.
Fill out an application - Apply online in under five minutes. We'll send personalized side-by-side policy options directly to your inbox.
Choose a policy - A Policygenius expert will help you compare policies and discounts across companies to find the right coverage amount for the right price. We'll handle the paperwork for you - for free.
Welcome the inspector - Your insurance company will typically send someone to perform a home inspection to make sure everything is in order.
Sign your policy - Once all the boxes are checked, you'll sign on that dotted line, pay your first premium, and relish the comfort of knowing that you and your stuff are covered.
→ Learn more about how to buy homeowners insurance
Choosing the best homeowners insurance company
There's a lot that goes into choosing an insurance company, from coverage options to discounts to online tools. The key is finding one that best fits your situation.
So which insurance company will offer you the most affordable option for the coverage you need? We’ve done the heavy lifting and reviewed the best homeowners insurance companies in 2021.
Why trust Policygenius?
The market, right here. Our customers save an average of $1,055/yr by shopping top-rated insurers in one place.
The right advice. Find out what you need and what you don’t. No dodgy sales pitches.
Right in your corner. We even re-shop your policy annually so you always have the best rate.
Need help? Policygenius’ licensed experts can help you from start to finish so you can feel confident and comfortable with your home insurance decisions.
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Frequently asked questions
How much is home insurance?
Homeowners insurance costs, on average, around $100 a month, or around $1,200 a year. Your cost will depend on a number of factors like where you live, the construction of your house, your deductible, and more. Discounts are a common way to make your policy more affordable.
How can I lower my home insurance rates?
There are several ways to make your home insurance more affordable. Be on the lookout for discounts from your company, like multi-policy discounts, first-time homebuyer discounts, and claim-free discounts. You can raise your deductible, but beware that this means you'll pay more out of pocket before the carrier pays out a claim. Most importantly, compare multiple companies while you're shopping to make sure you're getting the right coverage for the right price.
Which insurance company is best for homeowners?
There's no one-size-fits-all home insurance company for anyone. You'll want to find a company that offers policies in your state, and choose the one that offers the coverage you need at the most affordable cost. Look for companies that offer discounts, like bundling your home and auto insurance. Comparing companies before you buy is the best way to arrive at the right choice.
What does home insurance cover?
Your homeowners policy consists of different types of protection, like dwelling, personal property, and medical payments coverage. Your home insurance protects your property from perils listed in your policy, including fire, wind, and theft.
How much home insurance do I need?
Homeowners insurance coverage needs depend on your specific house. In general, your coverage amounts should be high enough to cover your home’s rebuild cost, the monetary value of your personal belongings, and your combined assets. If you need flood or earthquake coverage, you'll need to buy those separately.
Pat Howard
Homeowners Insurance Expert
Pat Howard is a homeowners insurance editor at Policygenius in New York City. He has written extensively about home insurance cost, coverage, and companies since 2018, and his insights have been featured on Investopedia, Lifehacker, MSN, Zola, HerMoney, and Property Casualty 360.